Analysis: High inflation continues impacting pet supplies

GlobalPETS delves deeper into the latest Consumer Price Index (CPI) figures in the UK, US, Germany, Netherlands, Finland and Australia to understand how the global inflationary environment is impacting the category.

Start of 2023

In the first 5 months of the year, the accumulated inflation of pet care products rose by 6.2% in the UK, with May being the lowest of the year so far (0.6%). 

In the same period last year, the accumulated inflation in the category was 3.9%. The figure is slightly lower as the more significant impacts of the war in Ukraine started in the second half of the year.

In the US, pet products registered an accumulated inflation of 4.2% between January and May 2023. In contrast with the UK, May was one of the months when prices increased the most this year (1%). 

The inflation in pet food in the North American country reached an accumulated 5.2% between January and May 2023, according to the US Bureau of Labor Statistics (BLS). 

In the first 5 months of 2022, American pet parents paid 6.5% more for pet food, while other pet products were 6% more expensive.

Paying more than a year ago

In May 2023, British pet parents paid 14.4% more for pet supplies than a year ago, while in the US, pet parents paid an additional 10.6%.

The inflation in the category is considerably higher than the overall CPI in both English-speaking nations. As of May, in the space of a year, general prices in the UK rose by 8.7%, while in the US, the rate was lower (4%).

In April 2023, yearly inflation had the highest impact on the pet category in the UK so far, at 15.4%. The biggest inflation hike in the US happened in January when pet parents paid 15.4% more for pet supplies than in the previous year.

The UK’s Office for National Statistics (ONS) commented that this is not a phenomenon that has just started and that rapid price increases have endured since the second half of 2021. 

“The 12-month rate has since gradually risen to what we are seeing now, and that’s because the pace at which prices for pet-related goods and services, in general, have been rising during this period and continues to increase,” an ONS spokesperson tells GlobalPETS.

Pet food

August 2022 saw the biggest inflation in pet food in 15 years in the US. The average price of pet food increased by 14% in the second half of 2022.

The price hike in pet food started very high at the beginning of 2023—at more than 15% in January and February—but the rate has declined slightly. 

In May, the last month of data available, American pet parents paid 13.8% more than during the same period in 2022. 

In May 2022, pet food in the US was 9.1% more expensive than in 2021. 

International perspective

Pet products in Germany were 16.6% more expensive in May 2023 than a year before, according to data from the Federal Statistical Office (Destatis). The country’s pet supplies prices increased considerably at the start of 2023, with German pet parents paying 19.1% more in March. 

In the Netherlands in May, pet products were 15.2% more expensive than a year before. The same trend has been observed in the first months of 2023, with April registering the lowest level of increase (14.3%).

In the Nordic region, Finland has been affected the heaviest by pet inflation this year. In May 2023, pet parents paid 18% more for pet products. Regarding pet food, the yearly inflation jumped to 18.8% as of May.

March was the month with the highest inflation rate. According to Statistics Finland, the price of pet products increased by 20.1% compared to the same month in 2022. Pet food reached a 21% increase, the highest on record this year so far.

In the first 3 months of 2023, the price of pet products in Australia increased by 2.4%. According to the Australian Bureau of Statistics, inflation in the category hit 6.7% in the same period last year.

Future forecast 

Although there are no specific predictions for pet products, insiders agree that the general inflationary trend will decrease in the coming months and into 2024.

The Bank of England expects prices to “fall quickly” this year and that inflation will be at 2% by late 2024. Furthermore, it believes that as people have less money to spend, “there will be less demand for goods and services in the UK,” which supposedly will cause prices not to rise as quickly. 

Euromonitor International acknowledges that the global outlook has “improved slightly” but warns that there is an element of uncertainty as there is a “multitude of risks and headwinds, elevating the likelihood of a downside scenario.”

The market research firm predicts the overall CPI will be reduced from 6.9% this year to 4.3% in 2024. According to the figures, the eurozone (2.7%), the US (2.5%) and China (2.3%) should register lower price increases than average.